A Company Expects Sales to Increase During the Coming Year

question 11

Multiple Choice

A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise.Which of the following conditions would cause the AFN to increase?

• A) The company increases its dividend payout ratio.
• B) The company begins to pay employees monthly rather than weekly.
• C) The company's profit margin increases.
• D) The company decides to stop taking discounts on purchased materials.
• E) The company previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity.

---

Definitions:

Mediator

A neutral third party who facilitates discussion between parties to a dispute to encourage and assist their coming to an agreement; sometimes referred to as a conciliator.

Agreement

A mutual understanding or arrangement between two or more parties, usually establishing a legal obligation.

Administrative Tribunals

Specialized dispute adjudication forums created by statute, that have been given quasi-judicial powers to resolve disputes and enforce legislation.

Legislative Branch

The division of government responsible for creating, amending, and repealing laws, often consisting of one or more houses or assemblies.